UK users 'quitting net banking over security fears'

NEWS Some UK internet users have stopped using online banking because they are scared of identity theft, an analyst claims.

According to a national study from Forrester Research, two per cent of 11,300 survey respondents said email scams and malware threats have put them off internet banking.

Benjamin Ensor, a senior analyst at Forrester, said: "It's not just security fears. Sometimes they say security when they mean other things. People would rather say that than admit they are not comfortable with PCs.

"But it seems there is a segment of consumers who are worried about security threats. None of the banks are reporting a slowdown on customer registration or a loss of customers though."

The analyst said most web users are aware of security threats but many are complacent towards them. Ensor explained: "[A]bout half of the UK's net users are either complacent or paranoid about online banking security - so UK banks still face big communication and security problems."

The results come as a US study also found the number of people using internet banking has stagnated because of ID theft fears. But the same study also found that those who do use it are taking advantage of more services.

Last year phishing attacks claimed £12m from UK banks, according to the Association of Payment and Clearing System.

Forrester said banks need to address customers' concerns and complacency. Ensor said: "Much of the work that banks do to combat fraud rightly remains behind the scenes. But banks must also let customers know that they are taking action to boost their confidence in online banking security."